Why the Veem (ASX:VEE) share price hit an all-time high today

The Veem Ltd (ASX: VEE) share price hit an all-time high in afternoon trade following a positive sales update. Here's the rundown.

| More on:
three building blocks with smiley faces, indicating a rise in the ASX share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Veem Ltd (ASX: VEE) share price hit an all-time high in afternoon trade today after the company released a positive sales update.

The Veem share price climbed to a record high of 88 cents but has since retreated to 84.5 cents as it nears close of trade today.

Based in Perth, Western Australia, Veem designs and manufactures marine propulsion and stabilisation systems for global luxury motor yacht, fast ferry, commercial workboat and defence sectors.

The company's market leading gyrostabilisers (gyros) significantly reduce the rolling motions of vessels in waves. In turn, this enables sea-time in rough conditions and also helps reduce sea-sickness.

What did Veem announce?

The company has achieved its sales target, with revenue recorded at $3.6 million for the half-year ending 31 December. The company sold 8 gyrostabilisers in what has been a growing market since 2018.

At current, the company's order book has $3.9 million worth of products. In comparison, the corresponding period in 2018 achieved just over half a million in revenue.

Veem said that almost all gyros sales were for superyachts, offshore supply vessels and charter boats. However, there were some retrofit sales to Damen – a Dutch defence, shipbuilding, and engineering conglomerate company based in the Netherlands. This included an offshore supply vessel in the Gulf of Mexico and a local West Australian charter boat.

After demonstrating the capacity of its new gyro facility, the VG1000SD, the company sold 2 units to Damen. Currently, Veem has a 3-year agreement with Damen for the supply of gyros as an option onboard its FCS workboats.

In addition, Mexican offshore contractor, Naviera Integral, will use the new gyro onboard its Damen FCS vessel in sea trials next month. Both companies have a strategic alliance together where Damen provides workboats to Naviera Integral.

Words from the managing director

Veem managing director Mark Miocevich welcomed the performance, saying:

We are very pleased to see the sales of VEEM Gyros continue to increase strongly and to have delivered on our guidance provided to the market for the first half of FY21.

Given our level of inquiries, orders in hand, the Damen frame agreement and increased capacity in our Gyro facility, we expect this sales trend to continue.

About the Veem share price

The Veem share price is breaking new ground today after bottoming out at a multi-year low of 37 cents in June last year.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares finished the trading week on a high this Friday.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

Broker looking at the share price.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ARB, Block, Mayne Pharma, and Paladin Energy shares are charging higher today

These shares are having a strong finish to the week. But why?

Read more »

A woman puts her hands up as she smashes and breaks through a glass ceiling.
Share Gainers

How these 5 ASX 200 stocks are smashing the benchmark this week

These fives ASX 200 stocks have made some very happy shareholders this week. Here’s how.

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A smiling woman at a hardware shop selects paint colours from a wall display.
Broker Notes

After its strategy day, what does Macquarie think Wesfarmers shares are worth?

Let's see what the broker is saying about this blue chip.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Technology Shares

After surging 13% yesterday, are TechnologyOne shares a buy, hold or sell according to Macquarie?

Valuations matter when investing, and Macquarie feels no different.

Read more »